It doesn't matter if you're a large corporation or a sole-prop, contracts serve as the foundation of your business. If your company manages more than a dozen or so contracts per year and is still reliant on manual processes such as shared folders and spreadsheets, then you're likely exposing yourself to significant business risks.
Choosing the right software management platform requires a fair amount of planning and research; however, the time investment is worthwhile when considering the potential ROI - reducing time, increasing contract velocity, and managing risk will all pay dividends for your business in the long term. If your looking to implement a contract management platform for the first time, or simply looking to upgrade an inefficient system, consider these five tips for evaluating contract management software options:
1. Identify Your Needs
Before shopping for a new solution, thoroughly review your existing process and identify exactly what your business needs. Make a list of all pain points and bottlenecks and consider what phases of the contract lifecycle consume the most time and resources. Then, decide which stages of your lifecycle need to be upgraded.
There are three types of contract management software on the market, so before shopping, decide which type is the best fit for your business:
- Pre-signing Platforms - Support new contract requests, document creation, and the review process.
- Post-signing Platforms - Support storage, renewals, and integrations with other lifecyle solutions (DocuSign, SalesForce).
- Full Lifecycle Platforms - Helps businesses to manage the entire contract lifecycle from start to finish.
Contract management looks different for each company with many factors including industry and size influencing a contract's journey from conception to renewal. Nevertheless, there is a universal set of key features that all purchasing managers should keep in mind when seeking a new solution.
Key Contract Management Software Features for All Businesses
- Effective search capabilities
- State of the art security
- Configurable date alerts
- Sharing & role permissions
- Third-party integrations
- Quality customer support (including implementation support)
2. Calculate Expected ROI
Prior to testing any platforms, determine how much your business is willing to spend. Below are four ways a good contract management platform will help a business save money in the long run:
Prior to purchasing a solution, businesses should forecast potential time savings that would occur from automating various stages of the lifecycle. Take the number of hours each employee spends on contract management each year, multiply it by their hourly salary, and then sum the total results. This will give you a sense of how much your current contract lifecycle costs. Depending on how inefficient your current process is, you can assume an upgraded solution could reduce that cost by 25% to 75%
Staying Ahead of Auto Renewals
A good contract platform should prevent teams from missing auto renewing contracts and instead, allow enough time to renegotiate unfavorable terms. Consider the number of missed auto renewals that occur on an annual basis and try to calculate how much your business could have saved if the unfavorable contracts had been cancelled or renegotiated.
Avoiding Duplicate Contracts
Businesses with multiple subdivisions or subsidiaries often fail to implement an enterprise-wide approach to contract management. This often leads to companies contracting with multiple vendors for the same service or even executing multiple contracts with the same vendor for the same service. Contract software can help businesses better track vendors and the services they provide. Take a look at the number of duplicate contracts your business currently has in its repository,and determine the potential savings achieved from canceling or combining where possible.
Increasing Contract Velocity
The volume of contracts your business is capable of reviewing, negotiating, and signing in a given year has drastic impacts on your annual revenue. If your company's ability to close deals is hampered by a slow legal queue, then making improvements can drastically improve the amount of revenue your company can book on an annual basis.
3. Do Your Research
Once you've decided on the feature set and how much you're willing to spend, conduct research and narrow your choices down to four or five potential platforms:
- Conduct a benchmarking analysis to determine what solutions are used by other companies in your industry.
- Seek recommendations from your network or others in your field.
- Conduct online research using a reputable software comparison website like Capterra.
4. Schedule product demos
Schedule a product demo with each of the software providers on your list. During the demo, evaluate each platform's usability and functionality. Note the benefits as well as the gaps. Be prepared with a list of questions and ask the software provider to address scenarios, problems, or concerns specific to your business. After the demo, ask the provider for a dummy log-in so that you can try the platform on your own time.
5. Select a Provider and Start a Free Trial
Once you've found a potential fit, ask if the provider offers a free trial. Keep in mind, many "freemium" products will not meet the needs of most businesses. Many free versions limit the number of users, documents, or features in an attempt to entice a customer to upgrade. Nevertheless, a free trial is a great way to test out a platform before purchasing.
Implementing a new application across your organization can be a daunting task and selecting the right solution requires planning and research. If you're in the market for a new contract management software, be sure to check out ContractSafe today. ContractSafe's full lifecycle platform is secure, affordable, and easy-to-use. A dedicated support staff is available to help streamline your organization's migration to a streamlined contract lifecycle.